You Are Considering a Stock Investment in One of Two

question 121

Multiple Choice

You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.) , both of which operate in the same industry. LotsofDebt, Inc. finances its $100 million in assets with $90 million in debt and $10 million in equity. LotsofEquity, Inc. finances its $100 million in assets with $10 million in debt and $90 million in equity. What are the debt ratio, equity multiplier, and debt-to-equity ratio for the two firms?

• A) LotsofDebt: 90 percent, 10 times, 9 times, respectively; and LotsofEquity: 10 percent, 1.11 times, 0.1111 times, respectively
• B) LotsofDebt: 10 percent, 1.11 times, 0.1111 times, respectively; and LotsofEquity: 90 percent, 10 times, 9 times, respectively
• C) LotsofDebt: 90 percent, 1.11 times, 0.1111 times, respectively; and LotsofEquity: 10 percent, 10 times, 9 times, respectively
• D) LotsofDebt: 10 percent, 10 times, 9 times, respectively; and LotsofEquity: 90 percent, 1.11 times, 0.1111 times, respectively

Assess the role of electronic agents in the formation of electronic contracts under E-Sign.

Understand the fundamental concepts of assignments and delegations in contract law.

Recognize the rights and obligations of third parties in contract assignments.

Identify the requirements and limitations of oral and written assignments.

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Definitions:

Perspective

A particular attitude towards or way of regarding something; a point of view, often influencing how situations are perceived.

Modifications

Changes or alterations made to a system, device, or software to customize or enhance its performance, appearance, or functionality.

Directory

In older operating systems, an electronic container that holds files and even other directories. Today’s operating systems use the term folder.